A simple and strictly local power generation system using rice husk in Bihar has proved that rural Indian communities are willing and able to pay for reliable electricity. This has kept the costs down, which is essential for their venture to be financially sustainable.

Some seven years ago, two young men, chums from their days at boarding school, chatted over the Internet about what they might do for villages in their home state of Bihar. The company they went on to create has begun establishing small power plants driven by gases from rice husk, a widely available agricultural waste. There are big plans for the future.

From the very beginning, “we wanted decentralised production,” said Gyanesh Pandey, an electrical engineer who worked for the semiconductor industry in the US at the time and returned to India two years back.

With a small power generation system, the distribution network could be simple and strictly local. This would keep costs down, which was essential for their venture to be financially sustainable.

They were clear too that they wanted to use an environmentally friendly form of energy, he said, speaking to this correspondent about the early discussions with his friend Ratnesh Yadav.

Later, another friend from his college days, Manoj Sinha, a microprocessor designer in the US, joined them.

Wind would not produce electricity throughout the year. A few years were spent examining the possibilities of using organic solar cells and biofuels. But neither met their requirements.

Biomass was the only option left, remarked Pandey. In villages, no form of biomass was left unutilised. Rice husk was the one thing that the farming communities did not use. “So we decided to use rice husk.”

The system they engineered does not burn rice husk but heats it up instead. A clean-burning mix of gases is produced that drive an engine. The engine turns a generator that produces electricity.

Gasification is a very well-understood technology, he said. The gasifier could be made in a local workshop. A cheap engine was bought from a company in Agra and suitably modified.

In the early hours on Independence Day in 2007, the first such plant began to produce electricity.

Husk Power Systems, the company they established, now has 16 plants in place. Each plant generates between 35 kilowatts and 100 kilowatts of electricity. The power is being supplied to about 60 villages at present.

“Awesome” reception

Public reception has been “awesome,” he observed. As soon as a plant was put up, requests for connections came from people in the neighbourhood. “We don’t have to worry about the market .... or convince anybody about it.”

“It is pretty hard to make economical electricity at a very small level,” remarked Charles ‘Chip’ Ransler, an American whose previous experience was setting up a software firm. He too was roped in and is now the company’s Chief Strategy Officer.

But that is just what had been achieved, he pointed out. By using electricity supplied by the company, people could cut their costs on alternate forms of energy, such as kerosene, by as much as 50%.

Reliability of supply was another factor that attracted customers. For the most part, the company was providing electricity in villages that were not connected to the power grid. The plants operated for only six to 12 hours a day, depending on local demand, he added.

The waste left after gasification too can be used. It was good manure and could also be burnt, said Pandey. Besides, it was rich in silica and could be sold to the cement industry.

Shell Foundation was impressed with the company’s performance and recently decided to provide a second round of funding for scaling up operations.

The Foundation is an independent charity established by the oil and energy giant, Shell Group, and focuses on enterprise-based solutions to global poverty and environmental challenges.

“Husk Power Systems is using unique technology and processes to tackle the rural energy deficit in India in an environmentally and commercially sustainable way,” said Simon Desjardins, an analyst with the Shell Foundation, in a press release.

More than 40% of the country’s population, living in approximately 125,000 villages, had no access to reliable electricity. Existing energy options in rural communities, such as diesel generator sets and kerosene lanterns, were polluting, prohibitively expensive, and logistically difficult to disseminate.

Even those villages that did have access to electricity were often subject to frequent power cuts and shortages in power supply. This directly impeded their economic development.

This company was proving that rural Indian communities were willing and able to pay for reliable electricity and that Bihar represented a viable market in which to deliver modern energy services, he added.

Each of its plants becomes operationally profitable within six months of starting.

Husk Power Systems wants to install 50 to 70 plants next year. It has an ambitious plan to have 2,014 plants up and running by the year 2014.

The company would then be able to supply electricity to about one crore customers in over 4,000 villages, according to Pandey.